Rates Mixed in Treasury Bill Auction

The Treasury Department sold $11 billion in three-month bills at a discount rate of 1.690%, up from 1.680% last week. An additional $11 billion was sold in six-month bills at a rate of 1.880%, down from 1.905%.

The three-month rate was the highest since April 8, when the bills sold for 1.710%. The six-month rate was the lowest since Feb. 25, when the rate was 1.850%.

The new discount rates understate the actual return to investors--1.720% for three-month bills with a $10,000 bill selling for $9,957.30, and 1.923% for a six-month bill selling for $9,905.

In a separate report, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 2.42% last week from 2.53% the previous week.